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buying bond

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OneSharer
    17-Jun-2008 18:07  
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Probably too sleepy to notice;  yes, as written indeed.  Thanks.  

Actually, the $100 angbao bond was my friend's idea, the one living overseas.
Guess I won't be able to do that here or receive that here...hee hee.   
 
 
178investors
    17-Jun-2008 17:56  
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As stated, the minimum is SGD250k, and SGD10k thereafter.



OneSharer      ( Date: 17-Jun-2008 17:49) Posted:



178investors, did they mention what is the minimum one must buy?  Can buy it like angbao for little kids, $100/+? 

 
 
OneSharer
    17-Jun-2008 17:49  
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178investors, did they mention what is the minimum one must buy?  Can buy it like angbao for little kids, $100/+? 
 

 
178investors
    17-Jun-2008 17:27  
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I put the question of buying bond direct to the test today to see if one cannot get bond direct from bank.

I went to ocbc to enquire about purchasing the recent Citigroup 5-yr SGD bond with coupon yield stated

at 4.98% redeemed at 100%.

The banker manager was able to pulled out quickly from the computer the bond of interest. An interesting

point to note is that you have to pay more than the par value even for newly issued bond. The banker

manager explained  banks would normally marked the bond price higher, that is their earning margin.

I saw on the computer, the bank's margin worked out to about 1% of the bond price. After factoring in

the bank's margin, the Citigroup 5-yr bond yield dropped to around 4.77% from 4.98%. Moreover, the

minimum note denomination is SGD250k and SGD10k thereafter, not a small sum. The coupon is payable

every 6mths. By the way, this Citigroup note is rated AA- , even after subprime fiasco.

Based on the above, looks like possible to buy bonds direct from the banks. Moreover, the

banker also able to show me a list of many other bonds that are available for sales (old/new issues).

 
 
 
OneSharer
    10-Jun-2008 17:51  
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Good to know (at least for future reference when interest rate better), thanks Alligator.  
 
 
Alligator
    10-Jun-2008 17:43  
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I thought it might be useful for those who are interested in Singapore Government Bond to read their website as well as fundsupermark.

Here is the link and some copy and paste for you :
   
Singapore Government Securities (SGS) are debt instruments of the Government of Singapore and can be in the form of treasury bills or bonds. Singapore Government bonds were first issued in the early 1960s to cater to the needs of banks and government agencies for risk-free and liquid assets. In 1998, the Monetary Authority of Singapore (MAS) embarked on a strategy to turn Singapore into an international debt hub and key to this is the development of an efficient and liquid SGS market. In May 2000, MAS undertook to ensure a sizeable free float of bonds above banks' minimum liquid asset holdings to meet the needs of both existing and new players, and to promote an active secondary market. For more background information on SGS, you may go to www.sgs.gov.sg

iFAST Financial is participating in the efforts to develop the SGS market by making SGS bonds available to retail investors via its online channel, Fundsupermart.com. Fundsupermart.com, which also retails unit trusts, plays the role of a secondary dealer in the SGS bond market. As a secondary dealer, Fundsupermart.com provides a transactional platform for SGS bonds that were previously issued in the primary market. It administers the entire buy/sell process for SGS bonds, including the coupon payments, and it interfaces with MAS-appointed primary dealers to obtain price quotes for all SGS bonds. (SGS primary dealers are committed to making continuous 2-way prices for SGS under all market conditions.)

Fundsupermart.com is the first online entity to be given the opportunity to make SGS bonds available to the public. It intends to harness the power of the Internet to raise awareness for SGS bonds and contribute to the efforts to develop Singapore into an international debt hub.


 
 

 
OneSharer
    10-Jun-2008 16:06  
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Hi Salute

Yes, I was told that a person could just walk into a bank, overseas, and purchase bond.    

Perhaps, you may want to try contacting another bank for info?  Some yrs back, I remembered contacting a bank here (forgot which one) regarding bond/treasury bill (also forgot which one).  The staff told me I needed to wait for its availability, via advertisement in the newspaper.  

Around that time, I also spoke to an OCBC staff who process treasury bills, and he was quite patient.  Unfortunately, I don't remember enough to relay more helpful info to you.  
 
 
178investors
    10-Jun-2008 15:30  
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Bond traders said selling not finished ... SGS bond 10-yr today trading up to 3.67% vs 3.59% yesterday.
 
 
CWQuah
    10-Jun-2008 13:25  
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I've never traded bonds in Singapore myself. But the general impression I have is that the bond market is pretty much catered to institutions if you look at the bond/bill instruments that are readily accessible to retail investors (I suppose Singapore bond mkt for retail is too small for most institutions to cater to). The high denomination per bond is probably also another factor why retail market is very limited in Singapore (look at Singapore Govt bonds).

Offhand other than very short-term Treasury bills and ABF bond counter listed on SGX, the other ways to get access are through investments in bond-based unit trusts/funds.

As for rates, individual countries will have different prevailing interest rates depending on the nature of their economic state and currency. E.g. Australia and New Zealand typically have much higher rates, as compared to Europe, US, Japan.

Singapore's rates are currently pretty low partly because of singnificant capital inflows from overseas investors interested in the Asia growth story, and partly because our rates follow US rates to some extent.
 
 
Salute
    10-Jun-2008 12:42  
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Hi Quah and 178,

Thanks for your in dept advise. I shall not get into it now, however, the question I raised was that is Singapore practice different from the States that we are not able to buy the bond direct from the issuers, eg. HDB's bond and we can't get it from the bond or it's handling agent.

I got the answer from DBS that they only sell bonds to institute( in bulk) and my remisier said that we have to bid the bonds counter like the way we bid for shares, that is not what I want. But is this how it work here?

Another matter, if the US Fed is going to increase the rate, I suppose the saving interest rate in every currency will be raised eg. A$ and S$, am I right?

Thanks

 
 

 
CWQuah
    10-Jun-2008 01:20  
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Hi Salute,

I have to agree with 178investors. The long-term interest rate trend is more likely to be going up (US Fed Reserve is unlikely to drop rates anymore; their increasing concern with arresting inflation is likely to lead to a future rebound in Fed interest rates in the next few years).

This is going to cause the bond yield to go up, i.e. to put it more simplistically without going too much into the actual formulae, the bond price is going to drop while the coupons stay constant over the next few years. In other words, you may face the risk of a depreciating bond price while earning fixed coupons.

I'm assuming that you intend to buy and hold the bonds for a couple of years and profit from the annual/semiannual coupons.

 
 
 
178investors
    09-Jun-2008 15:55  
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Don't think it's good to enter the bond market now. Just my thought.
 
 
Salute
    09-Jun-2008 12:04  
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Hi all the veterans,

I have wanted to buy bond last year when read that its issued by eg hdb of a return of 3%, but phillip isecurity was not selling and when I asked my remisier, he said we can only buy bonds fr the list on the stock, ie: we have to queue for it like the way we bid for shares.

When I approached DBS, the staff kept emphasesd on funds' package; after all the stress on that particular bond, he finally went to the back room a few trips and finally gave me an answer, ie: govt only sells the bond to institutions not to the public direct.

How different is it from the States, cos people that said that they can buy it direct. But over here, it seems not easy. First, a few sectors(the staff of DBS was so ignorant in handling my approach for the above matter). It make sme believe that the bonds are for the big institute.

Can someone advise me on this matter. thanks

 
 
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